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Proctor & Gamble uses residual income to evaluate the performance of its different divisions. In July, the shampoo division had average operating assets of $750,000,
Proctor & Gamble uses residual income to evaluate the performance of its different divisions. In July, the shampoo division had average operating assets of $750,000, net operating income of $90,000, and residual income of -$60,000. There is an investment opportunity worth $150,000 that can generate an additional $22,500 of net operating income. Would the manager of the shampoo division want to make this investment? a. Yes b. The manager would be indifferent between investing and not investing c. There is not enough information to answer this question O d. No
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